Playing Follow-The-Leader & Bitcoin Gold

POLONIEX:ETHUSDT   Ethereum / Tether USD
As many traders realize by now, Bitcoin has been setting the broad trend for all cryptos, especially when it comes to corrections. As some traders have pointed out, large upward price movements in Bitcoin are not always as strongly correlated in the altcoins as large downward price movements.

Given this, it helps to look at Bitcoin price activity in order to understand Ethereum price activity. At present, the bullish structure for Bitcoin above $5k doesn’t have any support. In order for Bitcoin to move higher, it needs to establish support, making the previous $5k resistance zone a support zone . We haven’t done that yet. Therefore, Bitcoin will be making its way back down to $5k, attempting to establish a $5k support zone . If not now, then in the near future. Have a a look at my other analysis on Bitcoin establishing support.

The question I then have is, if Bitcoin is moving down to $5k to establish a support zone , what would be the corresponding price of Ethereum?

If we look at Ethereum’s previous Elliot Wave ABC correction in mid September, we see that Ethereum returned to the long-term trend line , and a little beyond. That long-term trend line intersects the current price action at around the $260 mark.

Aditionally, $250 represents a support zone which was established early in the recent bull , shortly after the deep correction in mid September. It would make sense for Ethereum to test and confirm this support zone before proceeding higher, while at the same time returning to the long-term trend line . Also important to note is the lower trendline for the recent correction which intersects the $250 price zone before the October 25 fork .

But we can use Elliott Wave analysis to confirm this thinking. The recent bull trend has topped at about $353. The recent steep drop to the $287 support area corresponds to the A corrective wave. The recent recovery corresponds to the B wave. Now using Elliot Wave theory we get a 1.0 Fibonacci extension of wave A down to almost exactly $250, just below the trend line .

My time preference for this price target is before the October 25 Bitcoin Gold hard fork . The reason is, just prior to the fork , Bitcoin will likely rally, as people want their free Bitcoin Gold. And Ethereum will likely rally with Bitcoin , as will many altcoins, though perhaps not quite as strongly, if recent events are any indication.

After October 25 we will need to re-evaluate, but the Segwit2x fork on November 18 is a potential source of friction for Bitcoin . We may well begin to see a divergence in price between Bitcoin and Ethereum and other alts as we approach this later deadline.

Target: $250 or below before October 25
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